Amazon and Flipkart are changing the economics of selling on their marketplaces just weeks before India’s peak festive shopping period.
Amazon has shifted cancellation charges to a percentage of order value, with fees reaching 10% on orders below ₹10,000, while Flipkart has introduced penalties of up to ₹90 for certain dispatch and cancellation breaches.
The changes come as India’s e-retail market has reached $65–66 billion in annual GMV, putting greater focus on how marketplaces manage sellers, fulfilment and transaction costs.
Amazon Links Fees To Order Value
Amazon’s revised cancellation-fee structure took effect on August 17, 2026, for sellers using its Easy Ship and Self Ship services in India.
Under the new system, the cancellation charge is calculated as a percentage of the order value rather than being linked to the referral fee applicable to the product category.
Orders valued below ₹10,000 attract a 10% cancellation fee. The rate falls to 8% for orders between ₹10,001 and ₹50,000, 5% for orders between ₹50,001 and ₹1 lakh, and 2% for orders above ₹1 lakh. Amazon’s seller notice also specifies that 18% GST applies on top of the cancellation fee.
The fee applies when a seller cancels an order for reasons other than a buyer request. It can also be charged when an order is automatically cancelled because the seller fails to ship and confirm the shipment within 24 hours of the estimated ship date. Buyer-requested cancellations are excluded.
Amazon said seller-initiated cancellations account for less than 1% of orders on Amazon.in. The company said the revised fee is intended to encourage reliable fulfilment and that measures are in place for cancellations caused by circumstances beyond sellers’ control.
Closing Fees Rise Next Month
Amazon is also changing another component of seller costs.
From September 7, 2026, closing fees will increase by ₹1 for products priced up to ₹500 and by ₹3 for products priced above ₹500. The change applies to sellers using Amazon’s Fulfilment Centre, Easy Ship and Seller Flex models.
Closing fees are fixed charges applied to items sold through the marketplace and are separate from other seller charges, including referral and fulfilment fees.
The change therefore differs from the cancellation policy. The cancellation charge is conditional and applies when specified cancellation or fulfilment events occur, while the closing fee is associated with an item being sold.
Flipkart Introduces Seller Penalties
Flipkart has also revised its seller policies. Effective August 23, the Walmart-owned marketplace introduced penalties tied to dispatch delays and seller cancellations, according to people aware of the development.
A seller faces a ₹30 penalty if an order is not handed over to Flipkart’s logistics partner by the agreed dispatch-by date. A ₹60 penalty applies when a seller cancels an order after receiving it from a customer. If the seller misses the dispatch deadline and subsequently cancels the order, the penalty rises to ₹90.
The structure is different from Amazon’s percentage-based model. Flipkart’s charges are fixed amounts per affected shipment, while Amazon’s new cancellation fee varies according to the value of the order.
Fee Changes Come Amid Growth
The timing matters because India’s online retail market has expanded substantially. Bain & Company’s How India Shops Online 2026 report said e-retail GMV reached $65–66 billion in 2025, after growing 19–21% in value terms. The number of online shoppers reached roughly 290–300 million, while the number of sellers had tripled over the previous five years.
Festive shopping represents an important concentration of this activity. For the 2025 festive season, Redseer had projected more than ₹1.15 lakh crore in e-commerce GMV, with growth of 20–25% over the previous year. That figure is a 2025 projection and does not establish the size of the 2026 festive market.
At the same time, Amazon’s seller economics have not moved in only one direction. In March 2026, the company announced an expansion of zero referral fees to products priced under ₹1,000 across more than 1,800 categories, covering over 12.5 crore products. Amazon also announced reductions of more than 20% in Easy Ship fees for products priced below ₹300. The changes took effect on March 16.
The latest revisions therefore represent changes to specific parts of the seller-fee structure rather than a blanket increase across all Amazon marketplace charges.
For sellers, the immediate issue is operational discipline: cancellations and missed dispatch deadlines now carry clearly defined financial consequences on both major marketplaces. With the festive season approaching, the impact of these policies will depend on how frequently individual sellers encounter the events that trigger the charges.
